Mar 31, 2018
1. Significant accounting policies
1.1. Basis of preparation
1.1.1. Compliance with Ind AS
In accordance with the notification dated 16th February, 2015, issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (referred to as âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1, 2016.
The Standalone Financial Statements have been prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015. These are the Companyâs first Ind AS Standalone Financial Statements. The date of transition to Ind AS is April 1, 2016. Refer Note 64 for details of First-time adoption - mandatory exceptions and optional exemptions availed by the Company.
Up to the year ended March 31, 2017, the Company had prepared the Standalone Financial Statements under the historical cost convention on accrual basis in accordance with the Generally Accepted Accounting Principles (Previous GAAP) applicable in India and the applicable Accounting Standards as prescribed under the provisions of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014.
Reconciliations and descriptions of the effect of the transition has been summarized in note 64.
1.1.2. Historical Cost Convention
The Standalone Financial Statements have been prepared on the historical cost basis except for the followings:
A) Certain financial assets and liabilities and contingent consideration that is measured at fair value;
B) Assets held for sale measured at fair value less cost to sell;
C) Defined benefit plans plan assets measured at fair value; and
D) Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
1.2. Business combinations
In accordance with Ind AS 101 provisions related to first time adoption, the Company has elected to apply Ind AS accounting for business combinations prospectively from April 1, 2016. As such, Indian GAAP balances relating to business combinations entered into before that date, including goodwill, have been carried forward.
Business combinations (except for Business Combinations under Common Control) are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non controlling interests in the acquiree. For each business combination, the Company elects whether to measure the non controlling interests in the acquiree at fair value or at the proportionate share of the acquireeâs identifiable net assets. Acquisition-related costs are expensed as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their acquisition date fair values. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable. However, the following assets and liabilities acquired in a business combination are measured at the basis indicated below:
- Deferred tax assets or liabilities, and the assets or liabilities related to employee benefit arrangements are recognized and measured in accordance with Ind AS 12 Income Tax and Ind AS 19 Employee Benefits respectively.
- Assets (or disposal groups) that are classified as held for sale in accordance with Ind AS 105 âNon-current Assets Held for Sale and Discontinued Operationsâ are measured in accordance with that Standard
When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.
If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognized in profit or loss or OCI, as appropriate.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, then the gain is recognized in OCI and accumulated in equity as capital reserve.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. Any impairment loss for goodwill is recognized in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.
Business Combination under Common control
A business combination involving entities or businesses under common control is a business combination in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination and the control is not transitory. The transactions between entities under common control are specifically covered by Appendix C to Ind AS 103 and are accounted for using the pooling-of-interest method as follows:
- The assets and liabilities of the combining entities are reflected at the carrying amounts.
- No adjustments are made to reflect fair values, or recognize new assets or liabilities. Adjustments are made to harmonize significant accounting policies.
- The financial information in the financial statements in respect of prior periods is restated as if the business combination has occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination.
The balance of the retained earnings appearing in the financial statements of the transferor is aggregated with the corresponding balance appearing in the financial statements of the transferee. The identity of the reserves are preserved and the reserves of the transferor become the reserves of the transferee.
The difference, if any, between the amounts recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve and is presented separately from other capital reserves.
1.3. Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:
a) Expected to be realised or intended to be sold or consumed in normal operating cycle
b) Held primarily for the purpose of trading, or
c) Expected to be realised within twelve months after the reporting period other than for (a ) above, or
d) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
e) Current assets also include the current portion of non-current financial assets.
All other assets are classified as non-current.
A liability is current when:
a) It is expected to be settled in normal operating cycle
b) It is held primarily for the purpose of trading
c) It is due to be settled within twelve months after the reporting period other than for (a ) above, or
d) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
All other liabilities are classified as non-current.
Operating cycle: - Based on the nature of services and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current - noncurrent classification of assets and liabilities.
1.4. Fair value measurement
The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
The Company categorizes assets and liabilities measured at fair value into one of three levels as follows:
Level 1 â Quoted (unadjusted)
This hierarchy includes financial instruments measured using quoted prices.
Level 2
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 2 inputs include the following:
a) quoted prices for similar assets or liabilities in active markets.
b) quoted prices for identical or similar assets or liabilities in markets that are not active.
c) inputs other than quoted prices that are observable for the asset or liability
d) Market - corroborated inputs.
Level 3
They are unobservable inputs for the asset or liability reflecting significant modifications to observable related market data or Companyâs assumptions about pricing by market participants. Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
1.5. Investments in subsidiaries, associates and joint ventures
The Company records the investments in subsidiaries, associates and joint ventures at cost.
When the Company issues financial guarantees on behalf of subsidiaries, initially it measures the financial guarantees at their fair values and subsequently measures at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognized less cumulative amortization.
The Company records the initial fair value of financial guarantee as deemed investment with a corresponding liability recorded as deferred revenue. Such deemed investment is added to the carrying amount of investment in subsidiaries.
Deferred revenue is recognized in the Statement of Profit and Loss over the remaining period financial guarantee issued.
1.6. Non-current assets held for sale
Non-current assets & disposal Companyâs classified as held for sale are measured at the lower of carrying amount or fair value less costs to sell.
3.7. Property Plant and Equipment
Property, Plant and Equipment and intangible assets are not depreciated or amortized once classified as held for sale.
For transition to Ind AS, the Company has elected to continue with the carrying value of its Property, Plant and Equipment (PPE) recognized as of April 1, 2016 (transition date) measured as per the Previous GAAP and used that carrying value as its deemed cost as on the transition date.
PPE (except for land which is valued at Fair Value) are stated at actual cost less accumulated depreciation and impairment loss. Actual cost is inclusive of freight, installation cost, duties, taxes and other incidental expenses for bringing the asset to its working conditions for its intended use (net of CENVAT) and any cost directly attributable to bring the asset into the location and condition necessary for it to be capable of operating in the manner intended by the Management. Custom duty obligation on import of capital goods which is discharged through duty credit available under DEPB, SHIS (Status Holder Incentive Scrip) and other licenses purchased from third parties/other exporters is capitalized at the amounts paid to such parties for acquisition/transfer of the said licenses. It includes professional fees and borrowing costs for qualifying assets. Significant Parts of an item of PPE (including major inspections) having different useful lives & material value or other factors are accounted for as separate components. All other repairs and maintenance costs are recognized in the statement of profit and loss as incurred. Modvat Credit availed on purchased of fixed asset is reduced from the cost of respective areas.
Depreciation of these PPE commences when the assets are ready for their intended use.
The Company provides depreciation on Plant and Machineries on straight line method and on other assets on written down value method using the limits specified in Schedule II of the Companies Act, 2013 except for in case of Building, Residential Flats and Plant & Machinery for Petrochemical Division, the depreciation is provided based on the management estimate of the useful life which is different from that prescribed in Schedule II of the Companies Act, 2013, details of which are as given below.
Premium on leasehold land is amortised over the unexpired period of the lease.
Advances paid towards the acquisition of fixed assets, outstanding at each balance sheet date and the cost of the fixed asset not ready for its intended use on such date, are disclosed under capital advances (Long-term advances) and capital work-in-progress.
The estimated useful lives and residual values are reviewed on an annual basis and if necessary, changes in estimates are accounted for prospectively.
Depreciation on subsequent expenditure on PPE arising on account of capital improvement or other factors is provided for prospectively over the remaining useful life.
The useful life of property, plant and equipment are as follows:-
This is based on the consistent practices followed, past experience, internal assessment and duly supported by technical advice. Depreciation for assets purchased / sold during a period is proportionately charged.
Fixed assets whose aggregate cost is Rs.5,000 or less are depreciated fully in the year of acquisition.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or over the shorter of the assets useful life and the lease term if there is an uncertainty that the company will obtain ownership at the end of the lease term.
An item of PPE is de-recognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of PPE is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the Statement of Profit and Loss.
18. Intangible Assets
(i) Deemed cost on transition to Ind AS
For transition to Ind AS, the Company has elected to continue with the carrying value of intangible assets recognized as of April 1, 2015 (transition date) measured as per the Previous GAAP and use that carrying value as its deemed cost as on the transition date.
(ii) Intangible assets
- - Recognition of intangible assets Computer software
Purchase of computer software used for the purpose of operations is capitalized. However, any expenses on software support, maintenance, upgrade etc. payable periodically is charged to the Statement of Profit & Loss. Software are amortised on straight line basis based on the useful life of 3 years, which in managementâs estimate represents the period during which economic benefits will be derived from their use.
- - De-recognition of intangible assets
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from de-recognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognized in the Statement of Profit and Loss when the asset is derecognized.
(iii) Intangible assets under development
All costs incurred in development, are initially capitalized as Intangible assets under development - till the time these are either transferred to Intangible Assets on completion or expensed as Software Development cost (including allocated depreciation) as and when determined of no further use.
1.9. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity
1.9.1. Financial assets Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in following categories based on business model of the entity:
- Debt instruments at amortized cost
- Debt instruments at fair value through other comprehensive income (FVTOCI)
- Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)
- Equity instruments measured at fair value through other comprehensive income (FVTOCI)
Debt instruments at amortized cost
A âdebt instrumentâ is measured at the amortized cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method.
Debt instrument at FVTOCI
A âdebt instrumentâ is classified as at the FVTOCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
b) The assetâs contractual cash flows represent SPPI
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the P&L. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to P&L. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.
Debt instrument at FVTPL
Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as â accounting mismatchâ). The Company has not designated any debt instrument as at FVTPL.
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.
Equity investments (Other than Investment in Subsidiary, Associate & Joint Venture)
All equity investments are measured at fair value. Equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument by-instrument basis. The classification is made on initial recognition and is irrevocable
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. This amount is not recycled from OCI to P & L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L. Equity Investments (in subsidiary, associate and joint venture)
Investment in subsidiary is carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. The accounting policy on impairment of non-financial assets is disclosed in Note 3.10. On disposal of investments in subsidiary, associate and joint venture, the difference between net disposal proceeds and the carrying amounts are recognized in the statement of profit and loss.
De-recognition
A financial asset is de-recognized only when
- The Company has transferred the rights to receive cash flows from the financial asset or retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the Company has transferred an asset, it evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is de-recognized.
Where the Company has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is de-recognised if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of Impairment loss on the following financial assets and credit risk exposure:
a. Financial assets that are debt instruments, and are measured at amortized cost e.g., loans, debt securities, deposits, trade receivables and bank balance
b. Financial assets that are debt instruments and are measured as at FVTOCI
c. Lease receivables under Ind AS 17
d. Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 11 and Ind AS 18
e. Loan commitments which are not measured as at FVTPL
f. Financial guarantee contracts which are not measured as at FVTPL
The Company follows âsimplified approachâ for recognition of impairment loss allowance on:
Trade receivables or contract revenue receivables; & All lease receivables resulting from transactions within the scope of Ind AS 17
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit and loss (P&L).
1.9.2 Financial liabilities
Financial liabilities and equity instruments issued by the company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
Initial recognition and measurement
Financial liabilities are recognised when the company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortised cost unless at initial recognition, they are classified as fair value through profit and loss.
Subsequent measurement
Financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the statement of profit and loss.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial period which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortised cost using the effective interest method.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.
Financial guarantee contracts
Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
1.10. Impairment of non-financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or cash-generating unitâs (CGU) fair value less costs of disposal and its value in use.
Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Companys of assets.
When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.
Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit and loss.
A previously recognized impairment loss (except for goodwill) is reversed only if there has been a change in the assumptions used to determine the assetâs recoverable amount since the last impairment loss was recognized. The reversal is limited to the carrying amount of the asset.
1.11. Inventories
Inventory includes raw materials and components, work-in-progress and manufactured finished goods. Inventories are valued at the lower of cost and net realizable value.
Costs incurred in bringing each product to its present location and conditions are accounted for as follows:
- Raw materials are valued at cost (net of modvat) or net realisable value whichever is lower. Cost is ascertained on first in first out (FIFO) basis except in case of raw material liquid colorant where cost is determined on the basis of weighted average method.
- Finished goods and work in process inventory are valued at cost or net realisable value whichever is lower.
- Stocks of Shares are valued at cost or market value whichever is lower.
- Fuel, Stores, Spares and Consumables are valued at weighted average cost or net realisable value whichever is lower.
1.12. Cash and Cash Equivalent
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
1.13. Revenue recognition
- - Sale of Goods and Rendering of Service
Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Sales include excise duty recoverable. Liquidated damages are accounted for as and when they are ascertained.
Revenue from services is recognized on rendering of services to the customers. Revenue is recorded exclusive of taxes.
- - Dividend Income
Dividend income is recognized when right to receive is established.
- - Interest income
For all debt instruments measured either at amortized cost or at fair value through other comprehensive income, interest income is recorded using the effective interest rate (EIR).
Whereas for Fixed deposits , the same is recorded on time proportion basis.
1.14. Leases As a lessee
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to statement of profit and loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases.
As a lessor
Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases.
1.15. Foreign currency transactions
The functional currency of the Company is Indian Rupees which represents the currency of the economic environment in which it operates.
Transactions in currencies other than the Companyâs functional currency are recognized at the rates of exchange prevailing at the dates of the transactions. Monetary items denominated in foreign currency at the year end and not covered under forward exchange contracts are translated at the functional currency spot rate of exchange at the reporting date.
Any income or expense on account of exchange difference between the date of transaction and on settlement or on translation is recognized in the profit and loss account as income or expense.
Non monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation difference on such assets and liabilities carried at fair value are reported as part of fair value gain or loss.
In case of forward exchange contracts, the premium or discount arising at the inception of such contracts is amortized as income or expense over the life of the contract. Further exchange difference on such contracts i.e. difference between the exchange rate at the reporting /settlement date and the exchange rate on the date of inception of contract/the last reporting date, is recognized as income/expense for the period.
1.16. Employee Benefits Short term employee benefits:-
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employeesâ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
These benefits include compensated absences such as privilege leave and sickness leave. The undiscounted amount of shortterm employee benefits expected to be paid in exchange for the services rendered by employees is recognized as an expense as the related service is rendered by employees.
Post-employment obligations
i. Defined contribution plans
Provident Fund and employeesâ state insurance schemes
The Companyâs contributions towards provident fund, employee state insurance and superannuation fund are defined contribution schemes. The Companyâs contribution paid/payable under the schemes is recognised as expense in the statement of profit and loss during the period in which the employee renders the related service.
ii. Defined benefit plans Gratuity
The Companyâs gratuity benefit scheme is a defined benefit plan. The Companyâs net obligation in respect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value.
The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, are based on the market yields on Government securities as at the Balance Sheet date.
Actuarial gains and losses are recognized in OCI as and when incurred.
Compensated absences
Long term employee benefits comprise of compensated absences. These are measured based on an actuarial valuation carried out by an independent actuary at each Balance sheet date unless they are insignificant. Actuarial gains and losses and past service costs are recognised immediately in the statement of profit and loss.
Termination benefits
Termination benefits are recognized as an expense in the period in which they are incurred.
1.17. Debenture issue expenses
Debentures issue expenses are adjusted against securities premium.
1.18. Government Grants
Special Capital Incentives received for setting up a unit in backward area is treated as capital reserve.
1.19. Export incentives
The unutilised Export benefits / incentives against Export as on the Balance Sheet date are recognised as Income of the year.
3.20. Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying asset are capitalized as part of cost of such asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.
Borrowing costs consists of interest and other costs that an entity incurs in connection with the borrowing of funds.
1.21. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
Contingent assets are not disclosed in the financial statements unless an inflow of economic benefits is probable.
Contingent liabilities are disclosed in the Financial Statements by way of notes to accounts, unless possibility of an outflow of resources embodying economic benefit is remote.
1.22. Cash Flow Statement
Cash flows are reported using the indirect method. The cash flows from operating, investing and financing activities of the Company are segregated.
1.23. Earnings per share
Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
1.24. Income taxes
The income tax expense or credit for the period is the tax payable on the current periodâs taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses, if any.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Standalone Financial Statement. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
The carrying amount of deferred tax assets are reviewed at the end of each reporting period and are recognized only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.
Deferred tax liabilities are not recognized for temporary differences between the carrying amount and tax bases of investments in subsidiaries, branches and associates and interest in joint arrangements where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets are not recognized for temporary differences between the carrying amount and tax bases of investments in subsidiaries, associates and interest in joint arrangements where it is not probable that the differences will reverse in the foreseeable future and taxable profit will not be available against which the temporary difference can be utilized.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously
Dividend distribution tax paid on the dividends is recognized consistently with the presentation of the transaction that creates the income tax consequence.
1.25 Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.
Mar 31, 2017
1 Summary of Significant Accounting Policies
a System of Accounting
The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting, in accordance with accounting principles generally accepted in India (''Indian GAAP'') and comply with the Accounting Standards notified under section 133 of the Companies Act, 2013 read together with Rule 7 of the Companies (Accounts) Rules, 2014 and the provisions of the Companies Act, 2013, (the ''Act'').
b Revenue Recognition
Revenue from sale of products is recognized when the risk and rewards of ownership of products are passed on to the customers. Revenue is recorded exclusive of sales tax. Sales / Turnover include sales value of goods and excise duty thereon wherever applicable.
Revenue from services is recognized on rendering of services to the customers. Revenue is recorded exclusive of service tax. Interest income is recognized on the time proportion basis.
Dividend income is recognized when right to receive is established.
c Property, Plant & Equipment and Depreciation Property, Plant & Equipment
(i) Property, Plant & Equipment are stated at cost of acquisition, inclusive of freight, duties, taxes, borrowing cost, erection expenses / commissioning expenses etc. up to the date the assets are put to use.
(ii) Modvat Credit availed on purchase of Property, Plant & Equipment is reduced from the cost of respective assets.
Depreciation / Amortisation:
(i) The Company provides depreciation on Plant and Machineries on straight line method and on other assets on written down value method using the limits specified in Schedule II of the Companies Act, 2013 except for in case of Building, Residential Flats and Plant & Machinery for Petrochemical Division, the depreciation is provided based on the management estimate of the useful life which is different from that prescribed in Schedule II of the Companies Act, 2013, details of which are as given below:
This is based on the consistent Practices followed, Past experience, internal assessment and duly supported and duly supported by technical advice.
(ii) Depreciation for assets purchased / sold during a period is proportionately charged.
(iii) Property, Plant & Equipment whose aggregate cost is Rs.5,000 or less are depreciated fully in the year of acquisition.
(iv) Leasehold Land is amortized over the period of lease.
(v) Software are amortized on straight line basis based on the useful life of 3 years, which in management''s estimate represents the period during which economic benefits will be derived from their use.
d Investments
(i) Long Term Investments
Long Term Investments are valued at cost. Provision for diminution in value of investment is made to recognize a decline other than temporary.
(ii) Investment Property:
Investment in buildings that are not intended to be occupied substantially for used by, or in the operations of, the Company, have been classified as investment property. Investment Properties are carried at cost less accumulated depreciation and accumulated impairment losses, if any. Refer Note No.c for depreciation rate used for buildings.
e Inventory
(i) Raw materials are valued at cost (net of modvat) or net realizable value whichever is lower. Cost is ascertained on first in first out (FIFO) basis except in case of raw material liquid colorant where cost is determined on the basis of weighted average method.
(ii) Finished goods and work in process inventory are valued at cost or net realizable value whichever is lower.
(iii) Stocks of Shares are valued at cost or market value whichever is lower.
(iv) Fuel, Stores, Spares and Consumables are valued at weighted average cost or net realizable value whichever is lower.
f Excise and Customs Duty
Excise and Customs Duty payable in respect of finished goods and raw-material lying at factory/bonded premises are provided for and included in the valuation of inventory.
g Impairment of Assets
The carrying amounts of assets are reviewed at each Balance Sheet date for impairment so as to determine the provision for impairment loss, if any, required, or the reversal, if any, required of impairment loss recognized in previous periods.
h Employee Benefits
(i) Defined Contribution Plan
Companyâs contribution towards Superannuation Scheme with Life Insurance Corporation of India, Provident Fund, Employeeâs State Insurance Scheme, Government Welfare Fund and Employeeâs Deposit Linked Insurance are accounted for on accrual basis.
(ii) Defined Benefit Plan
Liability on account of Gratuity is accounted for on the basis of Actuarial Valuation at the end of each year.
(iii) Other Long term
Liability on account of other long term benefit such as âleave encashmentâ is made on the basis of actuarial valuation at the end of the year.
(iv) Other Short Term
Employee Benefits are charged to revenue in the year in which the related services are rendered.
i Debentures Issue expenses
Debentures issue expenses are adjusted against securities premium.
j Government Grants
Special Capital Incentives received for setting up a unit in backward area is treated as capital reserve.
k Foreign Exchange Transaction
(i) The transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction.
(ii) Current Assets and Current Liabilities in foreign currency outstanding at the Balance Sheet date are translated at the exchange rates prevailing on the date of Balance Sheet.
The resulting Exchange Difference, if any, is charged to the Statement of Profit and Loss.
l Export Benefit/Incentive
The unutilized Export benefits / incentives against Export as on the Balance Sheet date are recognised as Income of the year.
m Borrowing Costs
Borrowing Costs directly attributable to the acquisition or construction of Property, Plant & Equipment are capitalized as part of the cost of the Assets, up to the date the Assets are put to use. Other Costs are charged to the Statement of Profit and Loss in the year in which they are incurred.
n Earning Per Share (E.P.S.)
Basic EPS is computed using the weighted average number of equity shares outstanding during the period. Diluted EPS is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year-end, except where the results would be anti dilutive.
o Taxes on income
(i) Current tax is measured at the amount expected to be paid to the taxation authorities, using the applicable tax rates and tax laws.
(ii) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been announced up to the balance sheet date. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences between the taxable income and accounting income. The effect of tax rate change is considered in the Statement of Profit and Loss of the respective year of change.
(iii) Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws are recognized only if there is a virtual certainty of its realization supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is reasonable certainty of its realization.
(iv) At each balance sheet date the carrying amount of deferred tax assets is reviewed to reassure realization.
p Other Accounting Policies
These are consistent with the generally accepted accounting practices.
Mar 31, 2016
1 Summary of Significant Accounting Policies a System of Accounting
The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting, in accordance with accounting principles generally accepted in India (''Indian GAAP'') and comply with the Accounting Standards notified under section 133 of the Companies Act, 2013 read together with Rule 7 of the Companies (Accounts) Rules, 2014 and the provisions of the Companies Act, 2013, (the ''Act'').
b Revenue Recognition
Revenue from sale of products is recognized when the risk and rewards of ownership of products are passed on to the customers. Revenue is recorded exclusive of sales tax. Sales / Turnover include sales value of goods and excise duty thereon wherever applicable.
Revenue from services is recognized on rendering of services to the customers. Revenue is recorded exclusive of service tax.
Interest income is recognized on the time proportion basis.
Dividend income is recognized when right to receive is established. c Fixed Assets and Depreciation Fixed Asset
(i) Fixed Assets are stated at cost of acquisition, inclusive of freight, duties, taxes, borrowing cost, erection expenses / commissioning expenses etc. up to the date the assets are put to use.
(ii) Modvat Credit availed on purchase of fixed assets is reduced from the cost of respective assets.
Depreciation / Amortization:
(i) The Company provides depreciation on Plant and Machineries on straight line method and on other assets on written down value method using the limits specified in Schedule II of the Companies Act, 2013 except for in case of Building, Residential Flats and Plant & Machinery for Petrochemical Division, the depreciation is provided based on the management estimate of the useful life which is different from that prescribed in Schedule II of the Companies Act, 2013, details of which are as given below:
This is based on the consistent practices followed, past experience, internal assessment and duly supported by technical advice.
(ii) Depreciation for assets purchased / sold during a period is proportionately charged.
(iii) Fixed assets whose aggregate cost is Rs.5,000 or less are depreciated fully in the year of acquisition.
(iv) Leasehold Land is amortized over the period of lease.
(v) Software are amortized on straight line basis based on the useful life of 3 years, which in management''s estimate represents the period during which economic benefits will be derived from their use.
d Investments
Long Term Investments are valued at cost. Provision for diminution in value of investment is made to recognize a decline other than temporary.
e Inventory
(i) Raw materials are valued at cost (net of modal) or net realizable value whichever is lower. Cost is ascertained on first in first out (FIFO) basis except in case of raw material liquid colorant where cost is determined on the basis of weighted average method.
(ii) Finished goods and work in process inventory are valued at cost or net realizable value whichever is lower.
(iii) Stocks of Shares are valued at cost or market value whichever is lower.
(iv) Fuel, Stores, Spares and Consumables are valued at weighted average cost or net realizable value whichever is lower.
f Excise and Customs Duty
Excise and Customs Duty payable in respect of finished goods and raw-material lying at factory/bonded premises are provided for and included in the valuation of inventory.
g Impairment of Assets
The carrying amounts of assets are reviewed at each Balance Sheet date for impairment so as to determine the provision for impairment loss, if any, required, or the reversal, if any, required of impairment loss recognized in previous periods.
h Employee Benefits (i) Defined Contribution Plan
Companyâs contribution towards Superannuation Scheme with Life Insurance Corporation of India, Provident Fund, Employeeâs State Insurance Scheme, Government Welfare Fund and Employeeâs Deposit Linked Insurance are accounted for on accrual basis.
(ii) Defined Benefit Plan
Liability on account of Gratuity is accounted for on the basis of Actuarial Valuation at the end of each year.
(iii) Other Long term
Liability on account of other long term benefit such as âleave encashmentâ is made on the basis of actuarial valuation at the end of the year.
(iv) Other Short-term
Employee Benefits are charged to revenue in the year in which the related services are rendered. i Debentures Issue expenses
Debentures issue expenses are adjusted against securities premium. j Government Grants
Special Capital Incentives received for setting up a unit in backward area is treated as capital reserve. k Foreign Exchange Transaction
(i) The transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction.
(ii) Current Assets and Current Liabilities in foreign currency outstanding at the Balance Sheet date are translated at the exchange rates prevailing on the date of Balance Sheet.
The resulting Exchange Difference, if any, is charged to the Statement of Profit and Loss.
l Export Benefit/Incentive
The unutilized Export benefits / incentives against Export as on the Balance Sheet date are recognized as Income of the year.
m Borrowing Costs
Borrowing Costs directly attributable to the acquisition or construction of Fixed Assets are capitalized as part of the cost of the Assets, up to the date the Assets are put to use. Other Costs are charged to the Statement of Profit and Loss in the year in which they are incurred.
n Earning Per Share (E.P.S.)
Basic EPS is computed using the weighted average number of equity shares outstanding during the period. Diluted EPS is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year-end, except where the results would be anti dilutive.
o Taxes on income
(i) Current tax is measured at the amount expected to be paid to the taxation authorities, using the applicable tax rates and tax laws.
(ii) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been announced up to the balance sheet date. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences between the taxable income and accounting income. The effect of tax rate change is considered in the Statement of Profit and Loss of the respective year of change.
(iii) Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws are recognized only if there is a virtual certainty of its realization supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is reasonable certainty of its realization.
(iv) At each balance sheet date the carrying amount of deferred tax assets is reviewed to reassure realization. p Other Accounting Policies
These are consistent with the generally accepted accounting practices.
"The Company has only one class of equity shares having a par value of Rs.2/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting."
During the year ended 31st March, 2016, the Board of Directors, at its meeting held on 16th March, 2016, had declared an interim dividend of 25% (Re. 0.50 per equity share of par value of Rs.2 each) for the Quarter ended 31st March, 2016. Further, the Board of Directors, at its meeting held on 28th May, 2016, has decided that there will be no further dividend for the financial year ended 31st March, 2016. Accordingly, the total dividend declared and paid for the year ended 31st March, 2016 amounted to Rs.78,523,858/-excluding dividend distribution tax.
During the year ended 31st March, 2015, the aggregate amount of per share dividend recognized as distributions to equity shareholders was Re. 0.44. The total dividend appropriation for the year ended 31st March, 2015 aggregated to Rs.69,100,995/-excluding dividend distribution tax.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in the proportion to the number of equity shares held by the shareholders.
As per records of Company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.
Mar 31, 2015
A System of Accounting
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting, in
accordance with accounting principles generally accepted in India
('Indian GAAP') and comply with the Accounting Standards notified under
Section 133 of the Companies Act, 2013 read together with Rule 7 of the
Companies (Accounts) Rules, 2014 and the provisions of the Companies
Act, 2013, (the 'Act').
b Revenue Recognition
Revenue from sale of products is recognized when the risk and rewards
of ownership of products are passed on to the customers. Revenue is
recorded exclusive of sales tax. Sales / Turnover include sales value
of goods and excise duty thereon wherever applicable.
Revenue from services is recognized on rendering of services to the
customers. Revenue is recorded exclusive of service tax.
Interest income is recognized on the time proportion basis.
Dividend income is recognized when right to receive is established. c
Fixed Assets and Depreciation
Fixed Asset
(i) Fixed Assets are stated at cost of acquisition, inclusive of
freight, duties, taxes, borrowing cost, erection expenses /
commissioning expenses etc. up to the date the assets are put to use.
(ii) Modvat Credit availed on purchase of fixed assets is reduced from
the cost of respective assets.
Depreciation / Amortisation:
(i) The Company provides depreciation on Plant and Machineries on
straight line method and on other assets on written down value method
using the limits specified in Schedule II of the Companies Act, 2013
except for in case of Building, Residential Flats and Plant & Machinery
for Petrochemical Division, the depreciation is provided based on the
management estimate of the useful life which is different from that
prescribed in Schedule II of the Companies Act, 2013, details of which
are as given below:
Assets Management Estimate
of Useful Life inYears
Buildings 61.35 Years
Residential Flats 61.35 Years
Plant & Machinery for Petrochemical Division 21Years
Assets Useful life as per the limits
prescribed in Schedule II of the
Companies Act, 2013 in Years
Buildings 60 Years
Residential Flats 60 Years
Plant & Machinery for 25 Years
Petrochemical Division
This is based on the consistent practices followed, past experience,
internal assessment and duly supported by technical advice.
(ii) Depreciation for assets purchased / sold during a period is
proportionately charged.
(iii) Fixed assets whose aggregate cost is Rs.5,000 or less are
depreciated fully in the year of acquisition.
(iv) Leasehold Land is amortized over the period of lease.
(v) Software are amortised on straight line basis based on the useful
life of 3 years, which in management's estimate represents the period
during which economic benefits will be derived from their use.
d Investments
Long Term Investments are valued at cost. Provision for diminution in
value of investment is made to recognise a decline other than
temporary.
e Inventory
(i) Raw materials are valued at cost (net of modvat) or net realisable
value whichever is lower. Cost is ascertained on first in first out
(FIFO) basis except in case of raw material liquid colorant where cost
is determined on the basis of weighted average method.
(ii) Finished goods and work in process inventory are valued at cost or
net realisable value whichever is lower.
(iii) Stocks of Shares are valued at cost or market value whichever is
lower.
(iv) Fuel, Stores, Spares and Consumables are valued at weighted
average cost or net realisable value whichever is lower.
f Excise and Customs Duty
Excise and Customs Duty payable in respect of finished goods and
raw-material lying at factory/bonded premises are provided for and
included in the valuation of inventory.
g Impairment of Assets
The carrying amounts of assets are reviewed at each Balance Sheet date
for impairment so as to determine the provision for impairment loss, if
any, required, or the reversal, if any, required of impairment loss
recognized in previous periods.
h Employee Benefits
(i) Defined Contribution Plan
Company's contribution towards Superannuation Scheme with Life
Insurance Corporation of India, Provident Fund, Employee's State
Insurance Scheme, Government Welfare Fund and Employee's Deposit Linked
Insurance are accounted for on accrual basis.
(ii) Defined Benefit Plan
Liability on account of Gratuity is accounted for on the basis of
Actuarial Valuation at the end of each year.
(iii) Other Long term
Liability on account of other long term benefit such as 'leave
encashment' is made on the basis of actuarial valuation at the end of
the year.
(iv) Other ShortTerm
Employee Benefits are charged to revenue in the year in which the
related services are rendered.
i Debentures Issue expenses
Debentures issue expenses are adjusted against securities premium.
j Government Grants
Special Capital Incentives received for setting up a unit in backward
area is treated as capital reserve. k Foreign ExchangeTransaction
(i) The transactions in foreign currency are recorded at the exchange
rates prevailing on the date of the transaction.
(ii) Current Assets and Current Liabilities in foreign currency
outstanding at the Balance Sheet date are translated at the exchange
rates prevailing on the date of Balance Sheet.
The resulting Exchange Difference, if any, is charged to the Statement
of Profit and Loss.
l Export Benefit/Incentive
The unutilised Export benefits / incentives against Export as on the
Balance Sheet date are recognised as Income of the year.
m Borrowing Costs
Borrowing Costs directly attributable to the acquisition or
construction of Fixed Assets are capitalised as part of the cost of the
Assets, up to the date the Assets are put to use. Other Costs are
charged to the Statement of Profit and Loss in the year in which they
are incurred.
n Earning Per Share (E.P.S.)
Basic EPS is computed using the weighted average number of equity
shares outstanding during the period. Diluted EPS is computed using the
weighted average number of equity and dilutive equity equivalent shares
outstanding during the year-end, except where the results would be anti
dilutive.
o Taxes on income
(i) Current tax is measured at the amount expected to be paid to the
taxation authorities, using the applicable tax rates and tax laws.
(ii) Deferred tax assets and liabilities are measured using the tax
rates and tax laws that have been announced up to the balance sheet
date. Deferred tax assets and liabilities are recognised for the future
tax consequences attributable to timing differences between the taxable
income and accounting income. The effect of tax rate change is
considered in the Statement of Profit and Loss of the respective year
of change.
(iii) Deferred tax assets arising mainly on account of brought forward
losses and unabsorbed depreciation under tax laws are recognized only
if there is a virtual certainty of its realization supported by
convincing evidence. Deferred tax assets on account of other timing
differences are recognized only to the extent there is reasonable
certainty of its realization.
(iv) At each balance sheet date the carrying amount of deferred tax
assets is reviewed to reassure realization.
p Other Accounting Policies
These are consistent with the generally accepted accounting practices.
Mar 31, 2014
A System of Accounting
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting, in
accordance with accounting principles generally accepted in India
(''Indian GAAP'') and comply with the Accounting Standards prescribed by
Companies (Accounting Standards) Rules, 2006 issued by the Central
Government (which continues to be applicable in terms of General
Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate
Affairs in respect of section 133 of the Companies Act, 2013) and the
provisions of the Companies Act, 1956, (the ''Act'') to the extent
applicable.
b Revenue Recognition
Revenue from sale of products is recognized when the risk and rewards
of ownership of products are passed on to the customers. Revenue is
recorded exclusive of sales tax. Sales / Turnover include sales value
of goods and excise duty thereon wherever applicable.
Revenue from services is recognized on rendering of services to the
customers. Revenue is recorded exclusive of service tax.
Interest income is recognized on the time proportion basis.
Dividend income is recognized when right to receive is established.
c Fixed Assets and Depreciation
Fixed Asset
(i) Fixed Assets are stated at cost of acquisition, inclusive of
freight, duties, taxes, borrowing cost, erection expenses /
commissioning expenses etc. up to the date the assets are put to use.
(ii) Modvat Credit availed on purchase of fixed assets is reduced from
the cost of respective assets.
Depreciation / Amortisation:
(i) Depreciation has been provided for on straight line method on Plant
and Machineries, acquired up to 31st March 1988, at the rates
prevailing at the time of the acquisition (as per circular 2/89 dated
07.03.1989 issued by Department of Company Affairs) and for Plant and
Machineries, acquired after 31st March 1988, at the rates as per
Schedule XIV of the Companies Act, 1956.
(ii) Leasehold Land is amortized over the period of lease.
(iii) Software are amortised on straight line basis based on the useful
life of 3 years, which in management''s estimate represents the period
during which economic benefits will be derived from their use.
(iv) Depreciation on other assets has been provided on written down
value method at the rates specified in Schedule XIV of the Companies
Act, 1956.
d Investments
Long Term Investments are valued at cost. Provision for diminution in
value of investment is made to recognise a decline other than
temporary.
e Inventory
(i) Raw materials are valued at cost (net of modvat) or net realisable
value whichever is lower. Cost is ascertained on first in first out
(FIFO) basis except in case of raw material liquid colorant where cost
is determined on the basis of weighted average method.
(ii) Finished goods and work in process inventory are valued at cost or
net realisable value whichever is lower.
(iii) Stocks of Shares are valued at cost or market value whichever is
lower.
(iv) Fuel, Stores, Spares and Consumables are valued at weighted
average cost or net realisable value whichever is lower.
f Excise and Customs Duty
Excise and Customs Duty payable in respect of finished goods and
raw-material lying at factory/bonded premises are provided for and
included in the valuation of inventory.
g Impairment of Assets
The carrying amounts of assets are reviewed at each Balance Sheet date
for impairment so as to determine the provision for impairment loss, if
any, required, or the reversal, if any, required of impairment loss
recognized in previous periods.
h Employee Benefits
(i) Defined Contribution Plan
Company''s contribution towards Superannuation Scheme with Life
Insurance Corporation of India, Provident Fund, Employee''s State
Insurance Scheme, Government Welfare Fund and Employee''s Deposit Linked
Insurance are accounted for on accrual basis.
(ii) Defined Benefit Plan
Liability on account of Gratuity is accounted for on the basis of
Actuarial Valuation at the end of each year.
(iii) Other Long term
Liability on account of other long term benefit such as ''leave
encashment'' is made on the basis of actuarial valuation at the end of
the year.
(iv) Other Short Term
Employee Benefits are charged to revenue in the year in which the
related services are rendered.
i Debentures Issue expenses
Debentures issue expenses are adjusted against securities premium.
j Government Grants
Special Capital Incentives received for setting up a unit in backward
area is treated as capital reserve.
k Foreign Exchange Transaction
(i) The transactions in foreign currency are recorded at the exchange
rates prevailing on the date of the transaction.
(ii) Current Assets and Current Liabilities in foreign currency
outstanding at the Balance Sheet date are translated at the exchange
rates prevailing on the date of Balance Sheet.
The resulting Exchange Difference, if any, is charged to the Statement
of Profit and Loss.
l Export Benefit/Incentive
The unutilised Export benefits / incentives against Export as on the
Balance Sheet date are recognised as Income of the year.
m Borrowing Costs
Borrowing Costs directly attributable to the acquisition or
construction of Fixed Assets are capitalised as part of the cost of the
Assets, up to the date the Assets are put to use. Other Costs are
charged to the Statement of Profit and Loss in the year in which they
are incurred.
n Earning Per Share (E.P.S.)
Basic EPS is computed using the weighted average number of equity
shares outstanding during the period. Diluted EPS is computed using the
weighted average number of equity and dilutive equity equivalent shares
outstanding during the year-end, except where the results would be anti
dilutive.
o Taxes on income
(i) Current tax is measured at the amount expected to be paid to the
taxation authorities, using the applicable tax rates and tax laws.
(ii) Deferred tax assets and liabilities are measured using the tax
rates and tax laws that have been announced up to the balance sheet
date. Deferred tax assets and liabilities are recognised for the future
tax consequences attributable to timing differences between the taxable
income and accounting income. The effect of tax rate change is
considered in the Statement of Profit and Loss of the respective year
of change.
(iii) Deferred tax assets arising mainly on account of brought forward
losses and unabsorbed depreciation under tax laws are recognized only
if there is a virtual certainty of its realization supported by
convincing evidence. Deferred tax assets on account of other timing
differences are recognized only to the extent there is reasonable
certainty of its realization.
(iv) At each balance sheet date the carrying amount of deferred tax
assets is reviewed to reassure realization.
p Other Accounting Policies
These are consistent with the generally accepted accounting practices.
b. Term / Right attached to equity Share
The Company has only one class of equity shares having a par value of
Rs.2/- per share. Each holder of equity shares is entitled to one vote
per share.The Company declares and pays dividends in Indian rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting.
The Board of Directors, in their meeting on 29th May, 2014, proposed a
final dividend of Re.0.19 per equity share. The proposal is subject to
the approval of shareholders at the Annual General Meeting to be held
on 11th September, 2014. Further, the Board of Directors, in their
meeting on 14th March, 2014, has paid an interim dividend of Re.0.25
per equity share. The total dividend appropriation for the year ended
31st March, 2014 amounted to Rs.45,120,995/- excluding corporate
dividend tax.
During the year ended 31st March, 2013, the amount of per share final
dividend recognized as distributions to equity shareholders was
Re.0.44. The total dividend appropriation for the year ended 31st
March, 2013 amounted to Rs.45,120,995/- excluding corporate dividend
tax.
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the company,
after distribution of all preferential amounts. The distribution will
be in the proportion to the number of equity shares held by the
shareholders.
c. Terms of conversion / redemption of CCPS
The Company had issued 1,09,00,000 CCPS of Rs.10 each on 17th
September, 2010. CCPS carry a cumulative dividend of 10% p.a. The
Company declares and pays dividends in Indian rupees. The dividend
proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting.
The Board of Directors, in their meeting on 14th March, 2014, has paid
an interim dividend to CCP shareholders was Re.1. The total dividend
appropriation for the year ended 31st March, 2014 amounted to
Rs.10,900,000/-excluding corporate dividend tax.
During the year ended 31st March, 2013, the amount of per share final
dividend recognized as distributions to CCP shareholders was Re.1. The
total dividend appropriation for the year ended 31st March, 2013
amounted to Rs.10,900,000/- excluding corporate dividend tax.
The CCPS shall be converted into equity shares in the ratio of five (5)
new equity share of the face value of Rs.2/- each of the Company for
every one (1) CCPS of the face value of Rs.10/- each credited as fully
paid up.
Out of the total 1,09,00,000, 10% CCPS, 19,00,000 CCPS are convertible
into equity shares anytime after 1st April, 2011 but within a period of
five years from the date of allotment i.e. 17th September, 2010,
30,00,000 CCPS are convertible into equity shares anytime after 1st
April, 2012 but within a period of five years from the date of
allotment i.e. 17th September, 2010 on equal proportionate basis
amongst CCPS holders to the extent of their holding in the Company and
60,00,000 CCPS are convertible into equity shares anytime after 1st
April, 2013 but within a period of five years from the date of
allotment i.e. 17th September, 2010 on equal proportionate basis
amongst CCPS holders to the extent of their holding in the Company.
25% of above 1,09,00,000 CCPS numbering to 27,25,000 equity shares
arising out of conversion of CCPS shall be kept under lock-in for three
years from the date of listing of new shares on the Bombay Stock
Exchange.
d. Share held by holding/ultimate holding company and/or their
subsidiary/associates
None of the shares of the Company are hold by the Subsidiaries,
Associates or Joint Ventures of the Company
As per records of Company, including its register of shareholders /
members and other declarations received from shareholders regarding
beneficial interest, the above shareholding represents both legal and
beneficial ownerships of shares.
g. Shares reserved for issue under options
For details of shares reserved for issue on conversion of CCPS, please
refer note 2 (c) regarding terms of conversion / redemption of
preference shares.
a. Indian Rupee Loan from banks (Unsecured) includes Term Loan
amounting to Rs.112,775,862/- taken from Bank and carries interest @
Base Rate 2.50% TP (current applicable rate of interest is 12.75%).
The Loan is repayable in 82 monthly installments of Rs.3,000,000/- each
starting from September 2011 to June 2018 along with interest. Further,
the said loan is guaranteed by the personal guarantee of three
directors of the Company.
b. Indian Rupee Loan from banks (Unsecured) includes Term Loan
amounting to Rs.88,472,828/- taken from Bank and carries interest @
Base Rate 3.15% (current applicable rate of interest is 13.15%). The
Loan is repayable in 120 monthly installments of Rs.1,152,592/- each
starting from September 2012 and Rs.284,059/- starting from October
2012 along with interest.
c. Indian Rupee Loan from banks (Secured) represents Term Loan
amounting to Rs.8,222,625/- taken from Bank and carries interest @ Base
Rate 3.25% TP (current applicable rate of interest is 14%). The
Term Loan is secured by way of hypothecation / mortgage of land and
building, plant and machinery installed / to be installed out of
proposed new plant at Murbad. The said Loan is repayable in 16
Quarterly installments of Rs.2,875,000/- each and interest will be paid
on monthly basis as and when charged. Further, the said loan is
guaranteed by the Corporate Guarantee and personal guarantee of three
directors of the Company.
d. Deferred payments credits (Secured) represents Vehicle Loan
amounting to Rs.338,865/- taken from Bank and carries interest @
11.45%. The Loan is repayable in 36 monthly installments. The Loans are
secured against hypothecation of Specific Capital Assets i.e. Motor
Cars.
e. Deferred payments credits (Secured) represents Vehicle Loan
amounting to Rs.6,635,770/- taken from Others and carries interest in
the range of 9.74% to 14.76%. The Loan is repayable in 35 to 36 monthly
installments. The Loans are secured against hypothecation of Specific
Capital Assets i.e. Motor Cars.
f. Deferred sales tax represents the Certificate of Entitlement issued
by the Joint Director of Industries, Konkan Division, Thane on the
basis of section 89 of the Maharashtra Value Added Tax Act 2002 ("M V A
T Act") read with rule 81 of the M.V.A.T. Rules 2005 in respect of the
manufacturing unit located at Savroli, Post- Khopoli to defer the sales
tax liability as per the returns / assessment pertaining to the period
from 01-July-2010 to 30-June-2012. The Company shall pay the entire
amount in equal annual installments not exceeding five such
installments on expiry of 10th year and also as per the provisions of
Rules 81 M.V.A.T. Rules 2005.
g. Inter Corporate Deposits (Unsecured) are interest free.
h. Fixed Deposits (Unsecured) represents Deposits borrowed from Public.
The said deposit carried interest in the range of 6% to 15%. However
during the year, all unclaimed Fixed Deposit has been transferred to
Investor Education Protection Fund (IEPF).
Mar 31, 2013
A System of Accounting
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting, in
accordance with accounting principles generally accepted in India
(''Indian GAAP'') and comply with the Accounting Standards prescribed by
Companies (Accounting Standards) Rules, 2006 issued by the Central
Government and the provisions of the Companies Act, 1956, (the ''Act")
to the extent applicable.
b Revenue Recognition
Revenue from sale of products is recognized when the risk and rewards
of ownership of products are passed an to the customers. Revenue Is
recorded exclusive of sales tax. Sales /Turnover Include sales value of
goods and excise duty thereon wherever applicable.
Revenue from services is recognized on rendering of services to the
customers. Revenue is recorded exclusive of service tax.
Interest income is recognized on the time proportion basis.
Dividend income is recognized when right to receive is established.
c Fixed Assets and Depreciation
Fixed Asset
(i) Fixed Assets are staled at cost of acquisition, inclusive of
freight, duties, taxes, borrowing cost, erection expenses /
commissioning expenses etc. up to the date the assets are put to use.
(II) Modvat Credit availed on purchase of fixed assets Is reduced from
the cost of respective assets.
Depreciation /Amortisation:
(i) Depreciation has been provided for on straight line method on Plant
and Machineries, acqui red up to 31 st March 1988, at the rates
prevailing at the time of the acquisition (as per circular 2/89 dated
07.03.1989 Issued by Department of Company Affairs) and for Plant and
Machineries, acquired after 31st March 19S8, at the rates as per
Schedule XIV of the Companies Act, 1956.
(II) Leasehold Land Is amortized over the period of lease.
(lii) Software are amortised on straight line basis based on the useful
life of 3 years, which In management''s estimate represents the period
during which economic benefits wi II be derived from their use.
(iv) Depreciation on other assets has been provided on written down
value method at the rates specified In Schedule XIV of the Companies
Act, 1956.
d Investments
Long Term Investments are valued at cost. Provision for diminution in
value of investment is made to recognise a decline other than
temporary.
e Inventory
(i) Raw materials are valued at cost (net of modvat) or net realisable
value whichever is lower. Cost is ascertained on first in first out
(FIFO) basis except in case of raw material liquid colorant where cost
Is determined on the basis of weighted average method.
(li) Finished goods and work in process inventory are valued at cost or
net realisable value whichever is lower.
(iii) Stocks of Shares are valued at cost or market value whichever is
Icwe -
(Iv) Fuel, Stores, Spares and Consumables are valued at weighted
average cost or net realisable value whichever is lower.
f Excise and Customs Duty
Excise and Customs Duty payable in respect of finished goods and
raw-material lying at factory/bonded premises are provided for and
included in the valuation of inventory.
g Impairment of Assets
The carrying amounts of assets are reviewed at each Balance Sheet date
for impai rment so as to determine the provision for impairment loss,
if any, required, orthe reversal, if any, required of impairment loss
recognized in previous periods.
h Employee Benefits
(I) Defined Contribution Plan
Company''s contribution towards Superannuation Scheme with Life
Insurance Corporation of Indie, Provident Fund, Employee''s State
Insurance Scheme, Government Welfare Fund and Employee''s Deposit Linked
Insurance are accounted for on accrual basis.
(II) Defined Benefit Plan
Liability on account of Gratuity Is accounted for on the basts of
Actuarial Val jailor at the end of each year,
(III) Other Long term
Liability on account of otfier long term benefit such as leave
encashment'' Is made on the basis ol actuarial valuation at the end of
the year.
(iv) Other Short Term
Employee Benefits are charged to revenue in the year in which the
related services are rendered.
I Debentures Issue expenses
Debentures issue expenses are adjusted against securities premium.
j Government Grants
Special Capital Incentives received for setting up a unit in backward
area is treated as capital reserve.
k Foreign Exchange Transaction
(I) The transactions In foreign currency are recorded at the exchange
rates prevailing on the date of the transaction.
(li) Current Assets and Current Liabilities In foreign currency
outstanding at the Balance Sheet date are translated at the exchange
rates prevaili ng on the date of Balance Sheet.
The resulting Exchange Difference, if any, is charged to the Statement
of Profit and Loss.
I Export Benefit/Incentive
The unutilised Export benefits/ incentives against Export as on the
Balance Sheet date are recognised as I ncome of the year.
m Borrowing Costs
Borrowing Costs directly attributable to the acquisition or
construction ol Fixed Assets are capitalised as part of the cost of the
Assets, up to the date the Assets are put lo use. Other Costs are
charged to the Statement of Profit and Loss in the year in wh ich they
are incurred.
n Earning Per Share (E.P.S.)
Basic EPS Is computed using the weighted average number of equity
shares outstanding during the period. Diluted EPS Is computed using the
weighted average number of equity and dilutive equity equivalent shares
outstanding during the year-end, except where the results would be anti
dilutive.
o Taxes on income
(i) Cu rrent tax is measured at Ihe amount expected to be paid to the
taxation authorities, using the applicable tax rates and tax laws.
(il) Deferred tax assets and liabilities are measured using the tax
rates and tax laws that have been announced up to the balance sheet
date. Deferred lax assets and liabilities are recognised for the future
tax consequences attributable to timing differences between the taxable
income and accounting income. The effect of tax rate change is
considered in Ihe Statement of Profit and Loss of the respective year
of change.
(Hi) Deferred tax assets arising mainly on account of brought forward
losses and unabsorbed depreciation under tax laws are recognized only
If there Is a virtual certainty of Its realization supported by
convincing evidence, Deferred tax assets on account of other timing
differences are recognized only to the extent there is reasonable
certainty oi its realization.
(iv) At each balance sheet date the carrying amount of deterred tax
assets is reviewed to reassure realization.
p Other Accounting Policies
These are consistent with the generally accepted accounting practices.
Mar 31, 2012
A System of Accounting
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting, in
accordance with accounting principles generally accepted in India
('Indian GAAP') and comply with the Accounting Standards prescribed
by Companies (Accounting Standards) Rules, 2006 issued by the Central
Government and the provisions of the Companies Act, 1956, (the
'Act') to the extent applicable.
b Revenue Recognition
Revenue from sale of products is recognized when the risk and rewards
of ownership of products are passed on to the customers. Revenue is
recorded exclusive of sales tax. Sales/Turnover include sales value of
goods and excise duty thereon wherever applicable.
Revenue from services is recognized on rendering of services to the
customers. Revenue is recorded exclusive of service tax.
Interest income is recognized on the time proportion basis.
c Fixed Assets and Depreciation Fixed Asset
(i) Fixed Assets are stated at cost of acquisition, inclusive of
freight, duties, taxes, borrowing cost, erection expenses/commissioning
expenses etc. up to the date the assets are put to use.
(ii) Modvat Credit availed on purchase of fixed assets is reduced from
the cost of respective assets.
Depreciation:
(i) Depreciation has been provided for on straight line method on Plant
and Machineries, acquired up to 31st March 1988, at the rates
prevailing at the time of the acquisition (as per circular 2/89 dated
07.03.1989 issued by Department of Company Affairs) and for Plant and
Machineries, acquired after 31a March 1988, at the rates as per
Schedule XIV of the Companies Act, 1956.
(ii) Leasehold Land is amortized over the period of lease.
(iii) Depreciation on other assets has been provided on written down
value method at the rates specified in Schedule XIV of the Companies
Act, 1956.
d Investments
Long Term Investments are valued at cost. Provision for diminution in
value of investment is made to recognise a decline other than
temporary.
e Inventory
(i) Raw materials are valued at cost (net of modvat) or net realisable
value whichever is lower. Cost is ascertained on first in first out
(FIFO) basis except in case of raw material liquid colorant where cost
is determined on the basis of weighted average method.
(ii) Finished goods and work in process inventory are valued at cost or
net realisable value whichever is lower.
(iii) Stocks of Shares are valued at cost or market value whichever is
lower.
(iv) Fuel, Stores, Spares and Consumables are valued at weighted
average cost or net realisable value whichever is lower.
f Excise and Customs Duty
Excise and Customs Duty payable in respect of finished goods and raw-
material lying at factory/bonded premises are provided for and included
in the valuation of inventory.
g Impairment of Assets
The carrying amounts of assets are reviewed at each Balance Sheet date
for impairment so as to determine the provision for impairment loss, if
any, required, or the reversal, if any, required of impairment loss
recognized in previous periods.
h Employee Benefits
(i) Defined Contribution Plan
Company's contribution towards Superannuation Scheme with Life
Insurance Corporation of India, Provident Fund, Employee's State
Insurance Scheme, Government Welfare Fund and Employee's Deposit Linked
Insurance are accounted for on accrual basis.
(ii) Defined Benefit Plan
Liability on account of Gratuity is accounted for on the basis of
Actuarial Valuation at the end of each year.
(iii) Other Long term
Liability on account of other long term benefit such as 'leave
encashment' is made on the basis of actuarial valuation at the end of
the year.
(iv) Other Short Term
Employee Benefits are charged to revenue in the year in which the
related services are rendered.
i Debentures Issue expenses
Debentures issue expenses are adjusted against securities premium.
j Government Grants
Special Capital Incentives received for setting up a unit in backward
area is treated as capital reserve.
k Foreign Exchange Transaction
(i) The transactions in foreign currency are recorded at the exchange
rates prevailing on the date of the transaction.
(ii) Current Assets and Current Liabilities in foreign currency out
standing at the Balance Sheet date are translated at the exchange rates
prevailing on the date of Balance Sheet.
The resulting Exchange Difference, if any, is charged to the Statement
of Profit and Loss.
I Export Benefit/Incentive
The unutilised Export benefits / incentives against Export as on the
Balance Sheet date are recognised as Income of the year.
m Deferred Revenue Expenditure
(i) Expenditure in the nature of miscellaneous expenditure repre-
sented by Deferred Revenue Expenditure (Voluntary Termination Benefits)
are amortized in accordance with Accounting Standard
15 (Revised) 'Employee Benefits' issued by the Institute of Chartered
Accountants of India.
(ii) Premium paid on prepayment and refinancing of term loans is
charged off over the tenor of the new loans.
n Borrowing Costs
Borrowing Costs directly attributable to the acquisition or
construction of Fixed Assets are capitalised as part of the cost of the
Assets, up to the date the Assets are put to use. Other Costs are
charged to the Statement of Profit and Loss in the year in which they
are incurred.
o Earning Per Share(E.P.S.)
Basic EPS is computed using the weighted average number of equity
shares outstanding during the period. Diluted EPS is computed using the
weighted average number of equity and dilutive equity equivalent shares
outstanding during the year-end, except where the results would be anti
dilutive.
p Taxes on income
(i) Current tax is measured at the amount expected to be paid to the
taxation authorities, using the applicable tax rates and tax laws.
(ii) Deferred tax assets and liabilities are measured using the tax
rates and tax laws that have been announced up to the balance sheet
date. Deferred tax assets and liabilities are recognised for the future
tax consequences attributable to timing differences be- tween the
taxable income and accounting income. The effect of tax rate change is
considered in the Statement of Profit and Loss of the respective year
of change.
(iii) Deferred tax assets arising mainly on account of brought forward
losses and unabsorbed depreciation under tax laws are recognized only if
there is a virtual certainty of its realization supported by convincing
evidence. Deferred tax assets on account of other timing differences
are recognized only to the extent there is reasonable certainty of its
realization.
(iv) At each balance sheet date the carrying amount of deferred tax
assets is reviewed to reassure realization.
q Other Accounting Policies
These are consistent with the generally accepted accounting practices.
Mar 31, 2011
1. System of Accounting
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting, in
accordance with accounting principles generally accepted in India
('Indian GAAP') and comply with the Accounting Standards prescribed by
Companies (Accounting Standards) Rules, 2006 issued by the Central
Government and the provisions of the Companies Act, 1956, (the 'Act')
to the extent applicable.
2. Revenue Recognition
Revenue from sale of products is recognized when the risk and rewards
of ownership of products are passed on to the customers. Revenue is
recorded exclusive of sales tax. Sales /Turnover includes sales value
of goods and excise duty thereon wherever applicable.
Revenue from services is recognized on rendering of services to the
customers. Revenue is recorded exclusive of service tax.
Interest income is recognized on the time proportion basis.
3. Fixed Assets and Depreciation
a. Fixed Asset:
i. Fixed Assets are stated at cost of acquisition, inclusive of
freight, duties, taxes, borrowing cost, erection expenses/
commissioning expenses etc. up to the date the assets are put to use.
ii. Modvat Credit availed on purchase of fixed assete is reduced from
the cost of respective assets.
iii. Exchange difference on account of foreign exchange fluctuation, if
any, is charged to profit & loss Account.
b. Depreciation:
i. Depreciation has been provided for on straight line method on Plant
and Machineries, acquired up to 31st March 1988, at the rates
prevailing at the time of the acquisition (as per circular 2/89 dated
07.03.1989 issued by Department of Company Affairs) and for Plant and
Machineries, acquired after 31st March 1988, at the rates as per
Schedule XIV of the Companies Act, 1956.
ii. Leasehold Land is amortized over the period of lease.
iii. Depreciation on other assets has been provided on written down
value method at the rates specified in Schedule XIV of the Companies
Act, 1956.
4. Investments
Long Term Investments are valued at cost. Provision for diminution in
value of investment is made to recognise a decline other than
temporary.
5. Inventory
a) Raw materials are valued at cost (net of modvat) or net realisable
value whichever is lower. Cost is ascertained on first in first out (Fl
FO) basis except in case of raw material liquid colorant where cost is
determined on the basis of weighted average method.
b) Finished goods and work in process inventory are valued at cost or
net realisable value whichever is lower.
c) Stocks of Shares are valued at cost or market value whichever is
lower.
d) Fuel, Stores, Spares and Consumables are valued at weighted average
cost or net realisable value whichever is lower.
6. Excise and Customs Duty
Excise and Customs Duty payable in respect of finished goods and
raw-material lying at factory/bonded premises are provided for and
included in the valuation of inventory.
7. Impairment of Assets
The carrying amounts of assets are reviewed at each Balance Sheet date
for impairment so as to determine the provision for impairment loss, if
any, required, or the reversal, if any, required of impairment loss
recognized in previous periods.
8. Employee Benefits
a) Defined Contribution Plan
Company's contribution towards Superannuation Scheme with Life
Insurance Corporation of India, Provident Fund, Employee's
State Insurance Scheme, Government Welfare Fund and Employee's Deposit
Linked Insurance are accounted for on accrual basis.
b) Defined Benefit Plan
Liability on account of Gratuity is accounted for on the basis of
Actuarial Valuation at the end of each year.
c) Other Long term
Liability on account of other long term benefit such as 'leave
encashment' is made on the basis of actuarial valuation at the end of
the year.
d) Other Short Term
Employee Benefits are charged to revenue in the year in which the
related services are rendered.
9. Debentures Issue expenses
Debentures issue expenses are adjusted against securities premium.
10. Government Grants
Special Capital Incentives received for setting up a unit in backward
area is treated as capital reserve.
11. Foreign Exchange Transaction
a. The transactions in foreign currency are recorded at the exchange
rates prevailing on the date of the transaction.
b. Current Assets and Current Liabilities in Foreign currency
outstanding at the Balance Sheet date are translated at the exchange
rates prevailing on the date of Balance Sheet.
The resulting Exchange Difference, if any, is charged to the Profit &
Loss Account.
12. Export Benefit/Incentive
The unutilised Export benefits / incentives against Export as on the
Balance Sheet date are recognised as Income of the year.
13. Deferred Revenue Expenditure
a. Expenditure in the nature of miscellaneous expenditure represented
by Deferred Revenue Expenditure (Voluntary Termination Benefits) are
amortized in accordance with Accounting Standard 15 (Revised) 'Employee
Benefits' issued by the Institute of Chartered Accountants of India.
b. Premium paid on prepayment and refinancing of term loans is charged
off over the tenor of the new loans.
14. Borrowing Costs
Borrowing Costs directly attributable to the acquisition or
construction of Fixed Assets are capitalised as part of the cost of the
Assets, up to the date the Assets are put to use. Other Costs are
charged to the Profit and Loss Account in the year in which they are
incurred.
15. Earning Per Share (E.P.S.)
Basic EPS is computed using the weighted average number of equity
shares outstanding during the period. Diluted EPS is computed using the
weighted average number of equity and dilutive equity equivalent shares
outstanding during the year-end, except where the results would be anti
dilutive.
16. Taxes on income
a) Current tax is measured at the amount expected to be paid to the
taxation authorities, using the applicable tax rates and tax laws.
b) Deferred tax assets and liabilities are measured using the tax rates
and tax laws that have been announced up to the balance sheet date.
Deferred tax assets and liabilities are recognised for the future tax
consequences attributable to timing differences between the taxable
income and accounting income. The effect of tax rate change is
considered in the profit and loss account of the respective year of
change.
c) Deferred tax assets arising mainly on account of brought forward
losses and unabsorbed depreciation under tax laws are recognized only
if there is a virtual certainty of its realization supported by
convincing evidence. Deferred tax assets on account of other timing
differences are recognized only to the extent there is reasonable
certainty of its realization.
d) At each balance sheet date the carrying amount of deferred tax
assets is reviewed to reassure realization.
17. Other Accounting Policies
These are consistent with the generally accepted accounting practices.
Mar 31, 2010
1. System of Accounting
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting, in
accordance with accounting principles generally accepted in India
(Indian GAAP) and comply with the Accounting Standards prescribed by
Companies (Accounting Standards) Rules, 2006 issued by the Central
Government and the provisions of the Companies Act, 1956, (the Act)
to the extent applicable.
2. Revenue Recognition
Revenue from sale of products is recognized when the risk and rewards
of ownership of products are passed on to the customers. Revenue is
recorded exclusive of sales tax. Sales / Turnover includes sales value
of goods and excise duty thereon wherever applicable. Revenue from
services is recognized on rendering of services to the customers.
Revenue is recorded exclusive of service tax. Interest income is
recognized on the time proportion basis.
3. Fixed Assets and Depreciation
a. Fixed Asset:
i. Fixed Assets are stated at cost of acquisition, inclusive of
freight, duties, taxes, borrowing cost, erection expenses/
commissioning expenses etc. up to the date the assets are put to use.
ii. Modvat Credit availed on purchase of fixed assets is reduced from
the cost of respective assets.
iii. Exchange difference on account of foreign exchange fluctuation, if
any, is charged to profit & loss Account.
b. Depreciation:
i. Depreciation has been provided for on straight line method on Plant
and Machineries, acquired up to 31st March 1988, at the rates
prevailing at the time of the acquisition (as per Circular 2/89 dated
07.03.1989 issued by Department of Company,Affairs) and for Plant and
Machineries, acquired after 31s1 March 1988, at the rates as per
Schedule XIV of the Companies Act, 1956.
ii. Leasehold Land is amortized over the period of lease.
iii. Depreciation on other assets has been provided on written down
value method at the rates specified in Schedule XIV of the Companies
Act, 1956.
4. Investments
Long Term Investments are valued at cost. Provision for diminution in
value investment is made to recognise a decline other than temporary.
5. Inventory
a) Raw materials are valued at cost (net of modvat) or net realisable
value which ever is lower. Cost is ascertained on first in first out
(FIFO) basis.
b) Finished goods and work in process inventory are valued at cost or
net realisable value whichever is lower.
c) Stock of Shares are valued at cost or market value whichever is
lower.
d) Fuel, Stores, Spares and Consumables are valued at weighted average
cost or net realisable value whichever is lower.
6. Excise and Customs Duty
Excise and Customs Duty payable in respect of finished goods and
raw-material lying at factory/bonded premises are provided for and
included in the valuation of inventory.
7. Impairment of Assets
The carrying amounts of assets are reviewed at each Balance Sheet date
for impairment so as to determine the provision for impairment loss, if
any, required, or the reversal, if any, required of impairment loss
recognized in previous periods.
8. Employee Benefits
a) Defined Contribution Plan
Companys contribution towards Superannuation Scheme with Life
Insurance Corporation of India, Provident Fund, Employees State
Insurance Scheme, Government Welfare Fund and Employees Deposit Linked
Insurance are accounted for on accrual basis.
b) Defined Benefit Plan
Liability on account of Gratuity is accounted for on the basis of
Actuarial Valuation at the end of each year.
c) Other Long term
Liability on account of other long term benefit such as leave
encashment is made on the basis of actuarial valuation at the end of
the year.
d) Other Short Term
Employee Benefits are charged to revenue in the year in which the
related services are rendered.
9. Debentures Issue expenses
Debentures issue expenses are adjusted against securities premium.
10. Government Grants
Special Capital Incentives received for setting up a unit in backward
area is treated as capital reserve.
11. Foreign Exchange Transaction
a. The transactions in foreign currency are recorded at the exchange
rates prevailing on the date of the transaction.
b. Current Assets and Current Liabilities in Foreign currency
outstanding at the Balance Sheet date are translated at the exchange
rates prevailing on the date of Balance Sheet.
The resulting Exchange Difference, if any, is charged to the Profit &
Loss Account.
12. Export Benefit/Incentive
The unutilised Export benefits / incentives against Export as on the
Balance Sheet date are recognised as Income of the year.
13. Deferred Revenue Expenditure
a. Expenditure in the nature of miscellaneous expenditure represented
by Deferred Revenue Expenditure (Voluntary Termination Benefits) are
amortized in accordance with Accounting Standard 15 (Revised) Employee
Benefits issued by the Institute of Chartered Accountants of India.
b. Premium paid on prepayment and refinancing of term loans is charged
off over the tenor of the new loans.
14. Borrowing Costs
Borrowing Costs directly attributable to the acquisition or
construction of Fixed Assets are capitalised as part of the cost of the
Assets, up to the date the Assets are put to use. Other Costs are
charged to the Profit and Loss Account in the year in which they are
incurred.
15. Earning Per Share (E.P.S.)
Basic EPS is computed using the weighted average number of equity
shares outstanding during the period. Diluted EPS is computed using the
weighted average number of equity and dilutive equity equivalent shares
outstanding during the year-end, except where the results would be anti
dilutive.
16. Taxes on income
a) Current tax is measured at the amount expected to be paid to the
taxation authorities, using the applicable tax rates and tax laws.
b) Deferred tax assets and liabilities are measured using the tax rates
and tax laws that have been announced up to the balance sheet date.
Deferred tax assets and liabilities are recognised for the future tax
consequences attributable to timing differences between the taxable
income and accounting income. The effect of tax rate change is
considered in the profit and loss account of the respective year of
change.
c) Deferred tax assets arising mainly on account of brought forward
losses and unabsorbed depreciation under tax laws are recognized only
if there is a virtual certainty of its realization supported by
convincing evidence. Deferred tax assets on account of other timing
differences are recognized only to the extent there is reasonable
certainty of its realization.
d) At each balance sheet date the carrying amount of deferred tax
assets is reviewed to reassure realization.
17. Other Accounting Policies
These are consistent with the generally accepted accounting practices.